Semiconductor Shortage Continues To Hit Ford, Automakers
Marc Stern's picture

Chip Shortages Cause Continuing Headaches For F-150, Others

Chip shortage causes Ford to shutdown F-150 assembly line jeopardizing the automaker's huge moneymaker.
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For the last few months, Ford and other major automakers have felt the ongoing pain of a significant shortage of needed semiconductors. Earlier this year, shortages forced Ford's assembly lines to stop because they didn't have enough crucial chips.

Ford, Others Feel Semiconductor Shortage

Those shutdowns have passed, many lasting for a month or so. However, the semiconductor shortage has continued. Automakers such as Ford, GM, Nissan, Honda, Volkswagen, and others have temporarily shut their lines. Or, they are taking a new strategy, building as much of the popular models as they can, then holding them while they wait for semiconductor supplies to catch up with the semi-completed vehicles.

Ford hasn't published how many trucks they are holding but it is likely that if some are waiting for their F-150s, the reason is this shortage. This has been going on for the last three months, almost since the industry began its revival in the depths of the winter.

Ford has chosen this latter option. Ford will build F-150s without specific modules and will then hold the units until the semiconductors needed to complete them are available. Then, the automaker will finish them up, followed by checking them closely. Once the automaker finishes the checkouts, Ford plans to ship them to dealers.

Ford F 150 Powerboost 2021

According to a Ford statement, the chip shortage "combined with parts shortages created by the central U.S. winter storm of February – is prompting Ford to build F-150 trucks and Edge SUVs in North America without certain parts, including some electronic modules that contain scarce semiconductors."

The automaker continued that it would "build and hold vehicles for a number of weeks, and then ship the vehicles to dealers once the modules are available and comprehensive quality checks are complete."

Ford Has Been Industry Leader

For the last 44 years, the F-150 has been the country's top-selling pickup and the light truck market leader. It is also a crucial money-generator for the automaker, bringing in significant gross revenues.

Acknowledging the hit that Ford would take due to the shortage, the automaker said in another statement yesterday that if the shortage were to continue into the first half of 2021, it could impact Ford's adjusted earnings before taxes of between $1 billion and $2.5 billion.

The chip shortage had had a significant impact at several of Ford's assembly sites. A spokesman for the automaker, Kelli Felker, told the Louisville Courier-Journal in an email that Ford had canceled the Louisville Truck Assembly Plant's Thursday night and Friday shifts. Other planned shutdowns have included the assembly of the Ford Escape and Lincoln Corsair. Ford expects to have those operations back by Tuesday.

Louisville has, as noted, had other shutdowns due to the chip shortage. The longest was a month earlier this year that idled 3,900 hourly workers.

2021 Ford Edge Has Been Impacted By The Chip Shortage

Industry Chip Shortage Explained

The auto industry is beset right now by a significant semiconductor shortage. The shortage had its start when the pandemic caught the auto industry off guard and sales slowed. In a cascade, the pandemic caused assembly lines to stop as sales slowed to a crawl. Because there were fewer trucks made, the number of semiconductors needed fell off.

The foundry sites found themselves with what they believed was excess capacity. Because the automakers weren't using large quantities of semiconductors, the foundry sites decided to move their now-slowed manufacturing facilities to new, more profitable chips. The chips used new, narrower spacing, which was great for the foundry plants but raised all kinds of trouble for the auto industry. The auto industry uses larger spacing on its chips that isn't interchangeable with current, narrower chip standards

Since the early 1980s, each new generation of vehicles has relied more and more on semiconductor technology. As each automotive generation has rolled off the line, it has included more and more technology in the form of semiconductors. Microprocessor technology controls many automotive functions. Today's cars can use a dozen or more microprocessors in main and subordinate subsystems. Most, if not all, systems use semiconductors for functions ranging from on-off to various functions. Today's cars use them for connectivity, control in systems ranging from brakes to wipers, and more.

Marc Stern has been an automotive writer since 1971 when an otherwise normal news editor said "You're our new car editor," and dumped about 27 pounds of auto stuff on my desk. I was in heaven as I have been a gearhead from my early days. As a teen, I spent the usual number of misspent hours hanging out at gas stations Shell and Texaco (a big thing in my youth) as well as working on cars. From there on it was a straight line to my first column for the paper, "You Auto Know," an enterprise that I handled faithfully for 32 years. Not too many people know that while I was writing YAN, I also handled computer documentation for a good part of my living. My best writing, though, was always in cars. My work has appeared in venues including Popular Mechanics, Mechanix Illustrated, AutoWeek, SuperStock, Trailer Life, Old Cars Weekly, Special Interest Autos and others. You can follow me on: Twitter or Facebook.


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